The FAR's 6 percent A/E fee cap limits what a federal agency can pay for designs, plans, drawings, and specifications to 6 percent of a project's estimated construction cost. A proposed rule published September 18, 2026 would apply that cap only to cost-type contracts. It is not final. Comments close October 19, 2026.
This is a federal piece, and it is about fee, not qualifications. It is written for the person your principal will ask, "Does this change what we can charge?" The short answer is not yet, and only on some contracts. State and local agencies set their own rules, and nothing here touches state DOT work.
What Is the FAR 6 Percent A/E Fee Cap?
The FAR 6 percent A/E fee cap is a ceiling on the design fee in a federal A/E contract. The current text, at FAR 15.404-4(c)(4)(i)(B), reads:
"For architect-engineer services for public works or utilities, the contract price or the estimated cost and fee for production and delivery of designs, plans, drawings, and specifications shall not exceed 6 percent of the estimated cost of construction of the public work or utility, excluding fees."
Two details in that sentence matter.
- It covers "the contract price." That wording reaches every contract type, including firm-fixed-price, which the American Institute of Architects (AIA) calls "the most common A/E contracting model used by the federal government."
- It covers design production only. Surveys, geotechnical studies, environmental services, and construction-phase services sit outside the 6 percent. The VA's supplement lists them. For a civil firm, that is often a large share of the contract.
The statute behind the cap is narrower than the FAR. 41 U.S.C. 3905(b)(3) limits "the fee in a cost-plus-a-fixed-fee contract for architectural or engineering services." It says nothing about fixed-price contracts. AIA, whose issue brief traces the cap to 1939, has argued for years that the FAR applies it more widely than the law does.
A cost-type contract reimburses your allowable costs and pays a fee on top. A firm-fixed-price contract pays one agreed price, whatever your costs turn out to be.
What Does the Proposed Rule Change?
The proposed rule adds three words to the fee cap and removes four. 91 FR 59406, FAR Case 2026-003, rewrites FAR Part 15 and six other parts. The preamble gives the fee cap one sentence: "In accordance with 41 U.S.C. 3905(b)(3), the rule would limit the six percent cap fee on contracts for architect-engineering services for public works or utilities to cost-type contracts."
| Current FAR | Proposed rule | |
|---|---|---|
| Section | 15.404-4(c)(4)(i)(B) | 15.404-9(c)(4)(ii) |
| What is capped | "the contract price or the estimated cost and fee" | "the estimated cost and fee" |
| Which contracts | All A/E contracts for public works or utilities | Those "using cost-type contracts" |
| Fixed-price design contract | Capped at 6 percent | No FAR cap |
| Cost-type design contract | Capped at 6 percent | Capped at 6 percent |
Section numbers and wording read from the proposed text, September 2026.
Since fixed-price is the usual model, that would take the cap off most civilian-agency design contracts.
Most of the FAR overhaul is already in use as class-deviation text. Not this part. The Part 15 deviation text still caps "the contract price." Unlike the FAR Part 36 proposed rule, which matched its deviation, this change exists only in the proposal.
AIA welcomed the change the same day. Its 2026 president, Illya Azaroff, FAIA, said AIA "has advocated for federal procurement rules that reflect the law as Congress wrote it," and the association will file comments in support.
What Doesn't the Proposed Rule Change?
Five things don't change under the proposed rule.
- The rules today. A proposed rule is not the FAR. The current cap governs until a final rule issues, and the proposal gives no date for one.
- Army, Navy, and Air Force work. Those departments have their own fee statutes, which Congress raised from 6 to 10 percent in the fiscal year 2024 defense bill. DFARS 236.606-70 applies that limit to "the contract price (or fee)," and this rule doesn't amend the DFARS. For USACE and NAVFAC design contracts, where many civil firms do their federal work, nothing moves.
- Agency supplements. The VA's rule repeats the 6 percent cap in its own text. This rule doesn't amend that either.
- The fair-and-reasonable test. A contracting officer still negotiates against a government estimate and still has to find the price fair and reasonable. Removing a ceiling is not a raise.
- Your submittal. Federal A/E selection is based on qualifications. Fee comes up only after your firm is ranked first, when negotiations begin. Nothing in an SF330 or an SOQ changes.
The fifth point is the one to repeat inside the firm. This rule would change the negotiation, not the submittal.
What Should Proposal Teams Do Before October 19?
- Brief your principal in three sentences. "It's proposed, not final. It only reaches civilian agencies, so USACE and NAVFAC keep their 10 percent limit. If it goes through, our fixed-price design contracts with civilian agencies lose the 6 percent ceiling, and we still negotiate a fair and reasonable price."
- Find your own examples. Pull your civilian-agency, fixed-price design contracts from the last three years. Note where the 6 percent ceiling set the fee or shaped the scope split.
- Decide whether to comment. A comment that supports a change is as useful as one that opposes it. File at regulations.gov and cite "FAR Case 2026-003" in the comment and on any attachment, as the rule instructs. Name proposed 15.404-9(c)(4)(ii) and use the numbers from step 2. What a useful comment looks like is in the Part 36 piece.
- Don't reprice anything yet. Until a final rule issues, negotiate under the text your contracting officer names.
October 19 is also the deadline for the Part 36 rule, so one sitting can cover both. The wider picture is in what the FAR overhaul means for A/E firms.
Frequently Asked Questions
What is the 6 percent fee limitation for A/E services?
The 6 percent fee limitation is a federal ceiling on design fees. Under FAR 15.404-4(c)(4)(i)(B), the price for producing and delivering designs, plans, drawings, and specifications can't exceed 6 percent of the estimated construction cost. Other services, such as surveys and construction-phase work, fall outside it.
Does the 6 percent fee cap apply to fixed-price A/E contracts?
Today, yes. The current FAR caps "the contract price," which covers fixed-price contracts. The proposed rule published September 18, 2026 would limit the cap to cost-type contracts. Until a final rule issues, the current text applies.
Does the proposed rule affect USACE or NAVFAC contracts?
Not directly. The Army, Navy, and Air Force have separate fee statutes, raised to 10 percent by the fiscal year 2024 defense bill and carried out through DFARS 236.606-70. The proposed rule amends the FAR, not the DFARS, so that limit stays in place.
When would the fee cap change take effect?
No date is set. Comments on FAR Case 2026-003 close October 19, 2026. The FAR Council then reviews them and publishes a final rule, which may differ from the proposal. Until then, the current 6 percent cap applies to all contract types.